SMALL BUSINESS: Beachwood's MakerGear finds its niche in 3-D printing

Photo by SHARON SCHNALL
Rick Pollack founded MakerGear in 2009 in his Shaker Heights garage and dining room.

By SHARON SCHNALL

Activity — sales, hiring, customers — abounds for MakerGear, a 5-year-old Beachwood company that expects this year to manufacture and ship at least 1,000 3-D printers to customers in the U.S. and overseas.

Owner-founder Rick Pollack in 2009 started the company in his Shaker Heights garage and dining room. As the company grew, so did the need for space, with the business eventually taking over more of his family's home and later office space at the Shaker Heights incubator LaunchHouse.

In June 2012, a final move consolidated operations at the firm's current Commerce Park location. Its 10 employees now occupy 4,000 square feet, growing from its initial 1,500-square-foot lease.

The company first served a predominantly “pro-sumer” market; a segment Pollack describes as serious or high-end hobbyists with computer or engineering background.

That early customer base has broadened to include middle and high schools and colleges and universities wanting to incorporate 3-D applications into the curriculum; artists seeking to make unique creations; and small businesses that print prototypes and do short-run production of custom-designed parts.

MakerGear originally focused on manufacturing parts for other 3-D printers; then, in 2010, the printer itself was added to the product mix. Customer 3-D-printed objects include a doll house and its furniture accessories, robot parts, gift wrap bows, figurines and parts for radio-controlled and model aircraft. All use the equipment's additive capabilities to deposit layer upon layer of material — in this case, heated plastic — to create a finished three-dimensional object.

As a 3-D printer part supplier, Pollack was in the right place at the right time when the 2009 expiration of the Fuse Deposit Modeling patent occurred; accordingly, he was able to take advantage of serving the printer market segment, said Bill Macy, deputy director of technology transition for America Makes, also known as the National Additive Manufacturing Innovation Institute.

“The more successful the industry got, the more affordable the printers got. MakerGear got attention as the first printers (in general) dropped below $10,000, then below $5,000,” Macy said.

America Makes, a Youngstown-based national accelerator for additive manufacturing and 3-D printing, has more than 85 national member organizations. "Even the good days are hard'

The fully assembled MakerGear M2 printer sells for $1,775 and a kit option requiring assembly is priced at $1,475. The assembled printer, kit and parts are sold through the company's and Amazon's websites, the latter since last September. While he declined discussing specifics, Pollack said 2013 gross sales were in the low seven figures. The business, to date, has received approximately $250,000 in loans, a line of credit and credit card use.

For more than 20 years, Pollack had been involved with software development and about 10 of those years were in small companies and startups, the latter from “concept to exit,” he said. The 3-D printer industry, full of opportunity and challenge, is suited for his temperament.

“It's how I am wired; it fits me. It's like running rapids,” he said. “Every day is different. It's challenging. Even the good days are hard.”

Yet he readily pointed out a critical difference between software and 3-D printers: manufacturing.

Establishing a reliable supply chain “was a painful process.” Was he na´ve about how the supply chain impacts company success? “Na´ve was a step up. I was oblivious,” he said.

Still, through trial and error, he learned. As the company's first employee, he manufactured the parts. Now he determines which parts will be made in-house and which will come from the supply chain. The goal is to develop, as much as possible, a locally-based supply chain.

Four to five local firms provide custom-manufactured parts; the remaining “off-the-shelf components” — motor and power supplies — are sourced from overseas suppliers.

“Contractor, by design, says to me they're going to be temporary,” Pollack said. “When you bring (employees) on and invest in them, they make incredible contributions.”

Contracting has been used, in a few instances, to observe a prospective employee or when a special skill set is needed for a limited duration.

The best employees, he said, are committed for the long haul and able to step in wherever needed, moving from one role to another. Employees also support, albeit gradually, Pollack's changing job description. Having focused exclusively on manufacturing and testing, he started last year to increasingly concentrate on sales and new product development.

As more people are hired, he sees himself further transitioning from day-to-day involvement.

“Rick has not had any issues letting go of the responsibility, but he does step in when he has to oversee and make sure everything's done properly,” said Karen Pollack, who is married to Rick Pollack and a MakerGear employee since 2010. She is in charge of shipping, logistics, inventory control and general management.

“I've been trying to extract myself from day-to-day operations and focus more on running the business,” he said. “They say, "Work more on your business than in it.' I'm trying to work on it.”

SECOND-STAGE STORIES

What has been MakerGear's biggest growing pain? “The biggest is the fact that we're self-funding. We have to use the revenue to drive the growth of our business. That's a lot of hard work … We have to run the business so that it runs off what it brings in. It's got to be self-sufficient.”

What is a building block of this business? “Something that I've learned through this is patience. You've got to give this time to simmer. It takes time to build momentum and come to fruition … You've got to learn to sit and wait and let the market catch on; let the product catch on … When you introduce a product, everybody in the world doesn't see it; it takes times. Over time, awareness spreads.”

What do you foresee as the next big challenge for MakerGear? “Manufacturing, even on a good day, is hard. When you have a good supply chain it's still hard. We're going to be working on continuing to build out our operations capabilities to build better products and do new product development.”This year, Crain's Cleveland Business is introducing a feature that will focus on small businesses and second-stage journeys. The stories will focus on smaller entities that have moved beyond — or are trying to move beyond — the startup phase. If you have a suggestion for a business or topic related to second-stage growth, contact Amy Ann Stoessel at astoessel@crain.com.

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